Tuesday, February 01, 2005

Taxpayers across the nation can breathe a little easier now. The chokehold the IRS had on you has weakened.

A U.S. appeals court has ruled the IRS cannot compel taxpayers to turn over personal and private property without a federal court order and that taxpayers can ignore the agencies summonses until actual enforcement action is taken.

Don't worry, gang. This wasn't a decision made by the jokers of jurisprudence, the Ninth Circuit in California. No, this was decided by the Second Circuit Court in Manhattan.

In the case Schulz v. IRS, the Second Circuit Court of Appeals in Manhattan ruled:

... absent an effort to seek enforcement through a federal court, IRS summonses apply no force to taxpayers, and no consequence whatever can befall a taxpayer who refuses, ignores, or otherwise does not comply with an IRS summons until that summons is backed by a federal court order. … [A taxpayer] cannot be held in contempt, arrested, detained, or otherwise punished for refusing to comply with the original IRS summons, no matter the taxpayer's reasons, or lack of reasons for so refusing.

Could this be the light at the end of the tunnel?

The appeals court decision [.pdf document] of Jan. 25 stated the federal courts protect taxpayers from an "overreaching" IRS and that the agency must go through the federal courts before force can be applied on anyone to turn over personal and private property to the IRS. Absent a federal court order, the IRS summons amounts simply to a "request," the court ruled, which can be ignored.